Fed announces yet another "fix" for a still-broken system

Last week, Federal Reserve Chairman Ben Bernanke announced that quantitative easing would continue in 2013. The spending to purchase mortgage-backed securities would increase from current levels of $40 billion per month to $85 billion per month and would include the purchase of long-term treasury bonds as well.

The Fed will continue this new round of quantitative easing (QE4) until the unemployment rate falls below 6.5 percent. This means it will be spending $85 billion a month (more than $1 trillion a year, if it lasts that long) to spur on job growth through lower interest rates.

At this rate, the Fed will theoretically increase its balance sheet to a whopping $4 trillion dollars by the end of 2013. A herculean effort, since just five years ago the Fed had less than $1 trillion on the books. However, if the inflation rate rises faster than expected, the treasury buying will stop before that point.

It concerns me that an announcement of this magnitude had little to no effect on the exchanges. It seems that, like any addiction, it takes more and more of the substance to get us excited, and an additional $45 billion a month doesn't appear to be enough to get the traders going.

What is it going to take to fix our ailing system? Between the fiscal cliff and QE4, what else does Washington have in its arsenal to ease the pain and keep us going for a few more years?

In my opinion, we need to get off the addiction of debt. We need to demand that the government begin to cut back on its spending habits and start decreasing -- not increasing -- our debt.

Joe Wirbick is president of Lancaster financial services firm Sequinox and specializes in retirement planning and distribution. This allows him to concentrate on developing strategies that help address the unique issues that confront retirees and those approaching retirement.